The fintech market is expected to grow beyond $340 billion in 2024 and exceed $1,152 billion by 2032.
These staggering numbers demonstrate the quick rate at which the fintech space is growing, naturally transforming the way we think about and handle money.
Innovations in technology are completely reshaping the financial sector, from vivid transformations in the solutions offered by any payment solutions company to mobile banking and cryptocurrency.
Below, we journey across the role of fintech in the future of the global financial landscape.
The disruption of traditional banking
In its early stages, technology was only used to make slight improvements in traditional processes and solutions in the financial industry. In most cases, its capabilities were focused on back-end functions.
However, the merger between technology and finance grew stronger as developments in the space enabled new models that completely disrupted standard banking solutions and processes.
Today, fintech businesses have developed alternatives that limit the reliance on established financial institutions and, instead, give back control to individuals and businesses.
For instance, mobile banking apps, P2P payment solutions, and digital platforms offer new ways for companies and consumers to manage and exchange finances. Virtual POS terminals are just one of the examples of modern convenient solutions that enable small businesses to accept payments without having to rely on physical card readers or cash registers.
The rise of the cashless economy
One of the most profound ways in which fintech is reshaping how we think about money is by popularising digital payments and gradually creating a cashless economy.
Thanks to the convenience of the modern digital solutions provided by fintech companies, cash is becoming obsolete. Rather than using physical notes to make payments, customers are actively turning an eye towards digital alternatives, like mobile wallets, contactless payments, and cryptocurrency.
This is only natural, considering the advanced security measures, speed advantages, and convenience of digital payments. Through a range of different fintech-powered platforms, consumers can make immediate purchases in a matter of seconds and at the comfort of a few clicks.
But apart from convenience, the innovations in the fintech space have also created new opportunities for businesses to minimise operational costs and dramatically enhance customer experiences. This can be achieved via things like multiple payment options, data analytics, and more.
Transforming the world of payments
In a world led by fintech, payments take completely avant-garde forms. Earlier, we mentioned that physical cash is no longer the most preferred payment option, but checks and wire transfers are also declining.
Instead, these payment methods are substituted by mobile transactions, contactless payments enabled by NFC technology, and more. Cross-border payments are also now more affordable and convenient than ever, guaranteeing quick transaction times and security.
In the near future, expectations are that solutions like unattended payment terminals will grow in popularity, eliminating the need to communicate with cashiers or machines to purchase products or services.
New opportunities for the underbanked
Another core way in which fintech is changing the financial landscape is by creating financial inclusion.
In some parts of the world, traditional banking systems are inaccessible to the population, creating unbanked or underbanked groups. This challenge is tackled with the help of fintech solutions, like mobile banking platforms, which offer financial services in areas with no banking systems.
Through these innovations, fintech is destroying barriers associated with location, democratising financial services for all. This not only benefits consumers in these areas but also empowers businesses to reach more regions.
The power of data in fintech
Among the strongest capabilities of fintech solutions are those related to data and AI.
Powerful data analytics and Artificial Intelligence are taking central parts of fintech solutions, creating promising, state-of-the-art tools for automation, personalisation, and efficiency.
For example, we see the rise of robo-advisors – solutions that operate via AI, delivering automated investment consulting at affordable rates.
On the other hand, through the use of big data, businesses can provide custom-made services and tailored offers to customers. As a result, the customer experience improves significantly, while the business benefits from reduced risk and more efficient operations.
The rise of neobanks
As the fintech space continues proving its value and capabilities, we are also witnessing the rise of neobanks – entirely digital banks that function with zero reliance on brick-and-mortar branches.
These innovative banks are completely digital, providing a fully online experience for customers via mobile apps. Neobanks enable users to open and manage checking and savings accounts and loans, and take advantage of investment products all through mobile applications.
The existence of neobanks only proves that legacy banks can be replaced in today’s highly digital and connected environment, where fintech dominates.
The future of fintech
Without a doubt, fintech is disrupting the future of money, giving rise to solutions and services that were considered unimaginable in the past.
As a result of the innovations in space, every aspect of how we interact with our funds, manage our finances, and move money is transformed. As these technologies continue expanding and evolving, we’re expecting to see even more significant changes.
For example, technologies like blockchain are still in their infant stages, but they have promising potential to further impact everything finance-related.
Our unquestionable move towards a digital world only increases fintech’s role in shaping the future of money, setting the scenes for one of the most exciting and revolutionary phases in the global economy.
